New ADBI Working Paper Highlights the Impact of "Made in China 2025" as a Catalyst for Firms' Green Innovation
The Asian Development Bank Institute (ADBI) has published a compelling working paper titled “Impact of ‘Made in China 2025’ Industrial Strategy on Firms’ Green Innovation: A Quasi-Natural Experiment”, authored by Dr. Asif Razzaq. The paper examines how China’s industrial policy has significantly driven green innovation among enterprises, particularly in response to growing environmental challenges.
Key takeaways from the working paper include:
- The “Made in China 2025” policy has had a significant impact on promoting green innovation across a variety of enterprises, particularly by alleviating corporate financing constraints, advancing digital transformation, and improving regional marketization.
- The analysis, which included 1,594 Chinese firms, found that 815 were directly impacted by the policy, while 779 served as a control group.
- The policy’s influence varies depending on location, sector, and pollution levels, with firms in the eastern regions and those with lower pollution levels experiencing more pronounced positive effects.
Dr. Asif Razzaq, a Senior Research Specialist from the CAREC Institute, who contributed valuable insights and data to the working paper, highlighted the dual goals of the “Made in China 2025” policy: enhancing China’s manufacturing competitiveness while fostering sustainable development through green innovation. This collaboration underscores the importance of regional partnerships in addressing shared challenges and advancing sustainability across borders.
The working paper also emphasizes the need to address regional disparities and tailor industrial policies to local conditions, enhancing the overall effectiveness of green innovation efforts. For more details, you can access the full report by clicking the link below:
Suggested citation:
Razzaq, A., D. Azhgaliyeva, and D. B. Rahut. 2024. Impact of “Made in China 2025” Industrial Strategy on Firms’ Green Innovation: A Quasi-Natural Experiment. ADBI Working Paper 1477. Tokyo: Asian Development Bank Institute. Available: https://doi.org/10.56506/VAXI8481